Some Approaching Deadlines

  • 20 February 2017. UCITS KIID - Annual update of the key investor information document (KIID) must be filed no later than this date (where required). Any update to the KIID filed with the Central Bank must be translated (as necessary) and filed in any other host jurisdictions where the UCITS is registered to market its shares/ units and uploaded on the UCITS' website.
  • 28 February 2017. Fitness & Probity - The Annual PCF Confirmation Return due date (for the year ending 31/12/16) for Investment Funds and Fund Service Providers (including AIFMs and UCITS management companies) is 28 February 2017.

The above list does not cover ad hoc filings (such as regulatory reports) or filings of annual accounts (and related documents which include the annual FDI Return) and semi-annual accounts or other similar returns which deadlines will vary to reflect the particular entity's year ends.

Central Bank publication of new AIF Rulebook and Central Bank AIFMD Q&A

As anticipated in our November Front Page newsalert, the Central Bank of Ireland (Central Bank) has implemented an important change to their requirements for loan originating Qualifying Investor AIFs (LQIAIFs), effective 3 January 2017. As expected, a revised AIF Rulebook has been published, accompanied by an updated CBI AIFMD Q&A (with new Q&A 1117-1122 dealing with LQIAIFs).

Up until now LQIAIFs were obliged to limit their operations to the business of issuing loans, participating in loans, participating in lending and to operations directly arising therefrom, to the exclusion of all other commercial business. This was seen by many industry participants as being too restrictive. As of 3 January, 2017, LQIAIFs may invest in debt and equity securities of entities or groups to which the LQIAIF lends. In addition, debt and equity securities may be held for treasury, cash management or hedging purposes.

This is a very welcome change as the inability to make an equity investment in a target company to which an LQIAIF had made a loan was a significant inhibiting factor that made the Irish LQIAIF regime unattractive to a lot of international managers. Hopefully, this change will broaden the appeal of the Irish LQIAIF regime and see the growth of regulated loan originating funds as such entities can have a key role to play in the real economy.

Moreover, and as anticipated in our December Front Page newsalert,

the revised Rulebook also incorporates a revision to the organisational requirements for boards of directors of Central Bank authorised AIFMS to align with the outcome of CP86. The organisational requirements for boards of directors of Central Bank authorised AIFMS have also been updated to align with the outcome of CP86 to reflect

  • the streamlining of managerial functions to 6 managerial functions, being regulatory compliance (including complaints from investors), fund risk management, operational risk management, investment management, capital and financial management and distribution:
  • the requirement that an AIFM shall not designate the same person to perform the investment management managerial function and either the fund risk management managerial function or the operational risk management managerial function.

The updates to the AIF Rulebook do not concern the amendments advised under the Central Bank’s Feedback Statement on CP 99 – Consultation on Amendments to the AIF Rulebook.

These revisions will be included in the Central Bank’s planned AIF Regulations (intended to replace the AIF Rulebook, mirroring the Central Bank UCITS Regulations approach). We do not yet know when the Central Bank’s expected consultation on its proposed draft AIF Regulations will issue.

Feedback Statement on CP 105 - Amendment to UCITS Regulations

The Central Bank published its Feedback Statement to CP 105 – Consultation on amendments to the Central Bank UCITS Regulations. The Central Bank will now proceed to amend the Central Bank UCITS Regulations to give effect to the changes described in the CP105 feedback statement. In addition, changes resulting from CP86 will also be reflected in the amending regulations.

Address by Gerry Cross, Central Bank Director of Policy & Risk at the Irish Funds Seminar on CP 86

The Central Bank has published the speech given by Gerry Cross, Director of Policy & Risk, at the Irish Funds Seminar on CP 86 which took place on 13 January 2017.

Mr Cross noted that "while the transitional period does not expire for 18 months, there is much for fund management companies to do in the interim. A lot of focus is bound to fall on reorganising the streamlined managerial functions and on compliance with the effective supervision requirement. But fund management companies should also note the guidance around the allocation of responsibility for regulatory obligations amongst designated persons and around proper documentation of policies and procedures. Fund management companies will need to create dedicated email addresses and establish procedures so that these are monitored daily. They will also need to consider how they are going to store their records so that they are immediately retrievable on request. As you will have seen, there is a lot in CP86…. Implementation will pose a number of challenges for fund management companies. Compliance will require careful planning and dialogue with directors, designated persons and service providers. It will not be something that can be rushed through at the last minute so I urge you to include CP86 compliance into your work planning for 2017."

Address by Grainne McEvoy, Central Bank acting Director of Securities & Markets Supervision. at Irish Funds Breakfast Briefing on 13 January 2017 and the Central Bank’s Independent Fund Directors Briefing on 16 January 2017

The Central Bank published the speech

given by acting Director of Securities & Markets Supervision, Grainne McEvoy, at Irish Funds Breakfast Briefing on 13 January 2017 and the Central Bank’s Independent Fund Directors Briefing on 16 January 2017. It looks at:

  • 2016 Supervisory Initiatives,
  • Total Expense Ratios,
  • Themed Review of Fund Share Classes (the Central Bank intends to follow-up on any issues with the individual funds),
  • Supervisory Priorities for 2017, which will include;
    • Depositary On-Site Inspections,
    • Full Risk Assessments,
    • Automation of Authorisation Processes, and
    • Streamlining Reporting Requirements.

The Criminal Justice (Money Laundering and Terrorist Financing)(Amendment) Bill

The Government approved the drafting of the Criminal Justice (Money Laundering and Terrorist financing (Amendment) Bill along the lines of the General Scheme on 20 December, 2016. The Bill will transpose most of the provisions of the 4th EU Money Laundering Directive (4AMLD). The Bill will amend the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 which gave effect to the 3rd EU Money Laundering Directive, it will also align the provisions with the recommendations of the Financial Action Task Force (FATF).The Partnership Government has published it's new Legislation Programme which sets out the Government's legislative priorities for the first half of 2017. Cabinet has prioritised 31 Bills for publication in this Programme including the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Bill.

Central Bank Markets Update

On 19 January 2017, the Central Bank published Issue 1 of 2017 of its Markets Update.